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Self-Insured ERISA Health Plans Sued

Over 100 CIGNA Administered Self-insured ERISA Health Plans Sued for Embezzlement-Health Plan Litigation Tsunami

This article highlights some major concerns in the Healthcare Industry. Let’s break it down. Alleged embezzlement by the major insurance company highlighted in the article from 100’s of self-insured companies. These are major companies including: JP Morgan Chase, Macy’s, etc., employing hundreds of thousands of people, that have been allegedly embezzled from. From an underwriting perspective, the allegedly embezzled claims that went through these plans ultimately lead to higher rates on premiums for the companies, as well as higher premiums for employees.

“Most troubling are accusations that the Plans, even after being alerted to these potentially illegal practices and despite formal complaints being lodged with the DOL, astonishingly continued to delegate and authorize Cigna, to investigate its own alleged wrongdoing!”

Why is that important? From an employee perspective now, look at the value of an annual raise. In industries with low margins, a good employee raise might be a small percentage of their annual salary. The value of the raise is immediately shot out of the window if the premiums and cost of healthcare are more than the actual raise. That is why it is so important to make sure the second biggest expense behind payroll, for most companies, is managed correctly and with good integrity.

Check out ClaimDOC’s blog for more healthcare industry news!

A New York State Study Explores the Variance with Hospital Prices

In a recent study completed by the New York State Health Foundation, the study dissects New York Hospital Facility pricing. The findings are intriguing and may shed some light on the pricing system across the country as a whole. One of six major takeaways that speaks for itself is:

“Certain contract provisions contribute to market dysfunction by hindering competition, product innovation, transparency, and cost containment strategies.”

One of the other key findings suggests that higher prices do not always correlate to higher quality. Likewise, hospitals that charge lower rates do not necessarily provide a lesser quality of work.

Everyone understands that hospitals provide valuable services that they should profit from to continue to uphold the highest standard of practice. However, the problem comes when a system gets a feedback loop that allows for hospital facilities to egregiously price claims as they come through.

Some hospitals get away with charging egregious prices because it is oftentimes overlooked when it is blindly passed through the claims process. As a result, employers and employees alike should be aware of these unreasonable claims to ensure that health care services are not overcharged.

This is why ClaimDOC performs the work that it does. We believe that everyone should pay a fair rate for the health care services that they receive. While also recognizing hospital facilities and providers should get paid for their work fairly and in a reasonable time.

Review the complete study Why Are Hospital Prices Different? An Examination of New York Hospital Reimbursement from the New York State Health Foundation for more information.

Hospitals Adapt to Ensure Payment for Their Services

Through increased cost sharing from high deductible health plans, patients are becoming responsible for more medical costs to facilities and providers.

The hospitals and medical facilities are using alternative methods in collecting patient responsibility. More hospitals are starting to require a payment from patients before they are even treated. This rate is expected to increase this year.

In a recent article featured on BenefitsPRO, Marlene Satter comments on the issue stating:

“Many hospitals are trying to collect before the bills are due, providing patients with care cost estimates before the fact and offering no-interest loans or perhaps discounts for prepayment.

The strategy isn’t foolproof, of course, with some patients deciding not to have whatever treatment is under discussion or at least to postpone it.”

Hospitals, just like other businesses, need to get paid for their work so they can continue to provide valuable services to the people of this great country. It is expected for patients to pay for treatment in a reasonable time. Over time, hospitals and medical facilities will continue to adapt to help enhance their cash flow.

Read Patients Being Pushed to Pay up Before Hospital Care, from BenefitsPRO for more information.

The Push for Consumerism in Health Care

There is a growing push for patients to take on the role of the consumer when seeking health care. However, the complexity of the health care industry naturally steers people away from taking greater control.

A movement of greater transparency has given patients more information and more choice. But despite these efforts, price comparisons are still hard to come by. And for those patients that need care immediately, searching around for the best care at a reasonable price is not an option.

Two unique options on the matter are shared in a recent article released by The Wall Street Journal. One says that there are simple steps that consumers could take to save a lot of money. While the other says that the health care system is still too complex for patients to navigate.

In the counter argument provided by Amanda Frost, she states:

“When it comes to making decisions about our health care, being a “smart shopper” takes more effort than most of us are willing to put in.”

Ultimately, until there is greater transparency in the health care industry, most people are unable to take on the daunting role of the consumer.

For more information about this topic, read Can Consumers Be Smart Health-Care Shoppers, from The Wall Street Journal.

Self-Insurance Protection Act (SIPA) Bill is Under Consideration by the House

Last month, we discussed the Self-Insurance Protection Act (SIPA) bill as it bounced around the Congressional floor. Most recently, this bill has cleared the House Committee on Education and the Workforce and is now up for consideration by the full house.

As this legislation continues to make its way through Congress, this inherently confirms the methodology behind self-funding through stop-loss coverage as a viable and rewarding option for taking on more risk. The ability to navigate the landscape of self-funding through stop-loss coverage provides many unique benefits that are not an option through fully insured coverage.

In an article written by Richard Stolz, he clarifies:

“federal regulators cannot redefine stop-loss insurance as “health insurance coverage” under federal law, ensuring that employers can continue to utilize this important financial risk-management tool when offering employees healthcare coverage through a self-funded plan.”

Meanwhile, there is a second bill, known as the Protecting Access to Care Act, that is also pending Congressional support. This bill would place a limit on all medical malpractice claims to help curb the costly practice of defensive law. The passing of this bill could have some unique medical malpractice changes that we all need to be aware of.

To learn more about both of these bills, read the article Congress Eyes Stop-Loss, Medical Malpractice Bills, from Employee Benefit News.